How does childcare work?

[RaccoonOnTheSofa]

So I am self employed and am entitled to 30 hours of childcare a week now my DC has turned 3. I got my code and passed it to the school.

I noticed when I did my tax return that the balance was £0, but didn’t think much of it as he has only just started in January and this was the first week. I checked again this morning and balance is still £0. Is this how it works? I thought there would be an amount I there and it would go down as it is used. I missed out on the thing where you get 25% off because I didn’t understand (I have ADHD and instructions really confuse me if they’re not written in a style I get) so I want to be sure I understand this completely!

thanks

I assume all nurseries will be different but we were always invoiced at the start of the month for the month ahead with an invoice that showed all dates due to be attended. Our 'free' hours (we used ours across 52 weeks so worked out as 21 hours a week) were then split across the week with the bill showing the additional payment for the hours over 21, along with any other payments such as lunch and snacks or trips out.

30 hours funding is for 38 weeks of the year. There is no monetary value shown to you. The funding covers care but not consumables, lunch etc. Your provider can give you details of additional fees that apply, if they charge any.

The same system can be used for Tax Free Childcare scheme where you pay in an amount and it gets topped up by 25%. Thus you are seeing a balance of £0, which is representing the amount in the Tax Free Childcare scheme part of the system.

I would post on the Childcare forum part of MumsNet as there is more discussion there about the funding schemes.

Have you spoken to your childcare provider to ask how payments work? If you aren't using the full 30 hours it could be that you don't owe anything as the hours are covered by your funded allocation?

“I noticed when I did my tax return that the balance was £0”

30 free hours is nothing to do with your tax return. You usually pass on the code to the childcare provider and they deduct the funded amount from your bill.

Sorry I’ve caused confusion, when I was doing my tax return I went on the childcare bit and checked, not
related! Just poorly worded!

So this is where the problem is - I’m currently using 18 out of my 30 hours and retaining the rest for school holidays, so shouldn’t there be an amount in there?

thanks

I have experience of receiving the 30 hours funding, and also do tax returns but caveat not self employed so I'm not sure if that's what a making the difference but I'll ask the question anyway!

Why are you looking at your tax return (self assessment?) for childcare hours info?

Also, you can start the Tax Free Childcare (TFC) at any time so pay towards any fees above the funded hours. You may have missed out for this month, but you can still do it for the future.

No I don’t understand at all! I’m not using all my hours so I thought there would be an amount to track, but maybe I’m wrong. I don’t understand any of it and missed out before and don’t want to have made a mistake and be hit by a bill!

If you're only using 18 hours there won't be a cost unless they charge for lunch etc.

Does your provider offer school holiday childcare (some are term time only). If so it might be worth asking them to split your 30 hours over 52 weeks rather than 38 as you can't bank hours to use at a later date but some providers will let you split them to equal 21 hours approx each week which would then cover you across school holidays if you only require 18 hours a week

Sorry, I did clear this up, that was just poor wording - I meant when I was doing my tax return I went and checked my account, they were related I was just being literal, apologies for the confusion.

But if the childcare is fully funded what would the benefit be now in doing the tfc? Before when I was paying it made sense but surely doesn’t now?

I don’t understand financial stuff at all 😩

Okay, I think I understand! So it isn’t what amount you have banked it’s what you owe?! I’m with you.

Sorry, this stuff has really thrown me.

our provider doesn’t but I told them on the forms I wanted to use another provider during holidays, I’m just waiting for that provider to accept and then I can sort it all out. I think that’s right?

My kids are older so the system will have changed. However talk to your childcare provider. They should be able to tell you what is happening with the 30 hours. But the 30 hours are not paid for in the usual sense - they are hours allocated to the provider, so there will be no cash value stored up anywhere.

I only used the one provider so not sure how it works to use two, but I would definitely ask for your hours to be split across 52 weeks 😊.

As @LittleOwl153has said it's an allocation rather than a monetary sum you're given and so you won't actually see any money at your end, but the provider will know it's paid for with the code you get from gov.uk. It is very complicated!

Funded hours and tax free childcare account are 2 completely different things.

You give the funded hours code to nursery, they should then invoice you for any outstanding amount if the funded hours don't cover it.

You add money to your tax free childcare account, it's like a savings pot or bank account that the govt top up by 20% (up to a max per year) You then pay the bill using the money you have added to your tax free account.

Okay great, thank you. I think I’ve invented in my head how it would work and got it completely wrong. I think because I’m doing partial hours and hoping to use the rest elsewhere then I thought I would be able to visually see that, but clearly that’s not how it works!

Okay thank you so much everyone who is explaining! I’ve definitely invented a whole system.

So if the hours aren’t banked can I use the unused hours with another provider during the holidays? I said this to the receptionist when I filled in the form and she said she was sure that was fine but then Maybe I’m wrong?

You need to talk to your nursery. Technically the hours are for term time only, so I don’t know whether it will be possible to save some for holidays. It will depend how they allocate it. Lots of providers can “stretch” the funding so instead of it being 30 hours a week in term time it’s 22(ish) all year round. So that should cover your normal usage at 18 a week but you may not be able to count on having credit to cover more hours in the holidays (if this is what you mean).

I meant when I was doing my tax return I went and checked my account
Which account? If it's the government childcare one in this screenshot that will always stay at £0 till you pay into it.

Thanks, yeah I just made up a scenario that was completely incorrect and then panicked! Such a numpty,
sorry!

I think you may have missed the boat for this term. All areas are different but in my area the funding deadline date has passed now for this term. Also I would defo get some info from the holiday provider as we're not supposed to offer the funded hours only through the holidays so they may not be able to claim this way. There are work arounds they can use tho so it's defo not a deal breaker but some settings may not bend the rules like this. Also the deadline has passed for this term so the hours not used will be lost. There will be some spare in the summer term if you get a claim in time but this may not cover the full 6 weeks. I suggest you talk to the holiday provider asap.

Also your balance won't ever show the hours that is dealt with directly between the nursery and the local authority.

Unfortunately you can't do this.

There are two funding models. Term time only or stretched funding (whole year). There is no option to offer holiday only funding. If you're not using all your hours during term time then they will go unclaimed.

I don’t think it works how you want it to. Hours are term time only, nurseries can stretch them but I doubt you’d be able to change provider for the holidays and get free hours then too. You might be better using an all year round nursery and stretching hours. Otherwise you’ll need to pay for holiday cover.

I've had a quick google and it looks like it's up to each council. Your best bet is to contact your local authority and ask them if you are permitted to save hours unused during term time and use then during the holidays.

Depending on the answer, you will also need to find a holiday care provider willing to accept the full rate of funding.

I used two providers gave both my code and there was no childcare charges. I don't remember any figures to track at my end.

Are you talking about your government gateway account? That's used for tax relief on child care. So say a parent pays £100 in to th account, the government then pays £20 in. And the parent uses the money to pay the provider. Thats different to three year funding.